Saturday, April 18, 2015

I have drafted and am now shopping an article positing that tens of thousands of Pennsylvanians who renewed private plan coverage on healthcare.gov for 2015 are now eligible for Medicaid -- and so, theoretically at least, are ineligible for the private plan subsidies they obtained last year and are counting on this year. Pennsylvania launched a "private option" Medicaid expansion (now in process of being converted back to traditional Medicaid) effective Jan. 1, 2015.

Here's the calculation. Of the roughly 318,000 Pennsylvanians who were enrolled in private coverage via healthcare.gov as of May 1, 2014, probably about 30% are eligible for Medicaid. That is roughly the percentage of of private-plan enrollees in non-expansion states on healthcare.gov who would have been eligible for Medicaid if their states had expanded (that is, the percentage of enrollees with incomes between 100% and 138% of the Federal Poverty level). If Pennsylvania enrollees' income profile roughly matched that of all the non-expansion states in aggregate, there were about 95,000 Medicaid-eligibles within that original group. Yet the number of Pennsylvanians who re-enrolled in private coverage for 2015 was just shy of 279,000 -- less than 40,000 fewer than the peak enrollment total.
Some detail here that I'll leave out of the article: By the time open enrollment for 2015 began on November 15 there had likely been some enrollment attrition -- though probably not much, given Pennsylvania's high May-to-March retention rate. We know that attrition in all ACA markets combined was about 16% by October, as HHS eventually announced that enrollment had dropped from just over 8 million as of May 1 to about 6.7 million by that point. But there was lots of variation. Some states provided enrollment updates in the off-season, and thanks to Charles Gaba's careful tracking we also know that at least a couple of them had gained enrollees by October, while others had lost very few. Given that Pennsylvania's March 2015 re-enrollment total was only about 39,000 below its May 2014 total, attrition by the time open enrollment began for 2015 was probably slight. If it matched the national rate, re-enrollments as of March would exceed enrollment as of April.

Let's posit, then, that there were 300,000 private plan enrollees in Pennsylvania by the end of 2014, and 90,000 of them were Medicaid-eligible. Only 21,000 dropped private coverage. Even if there was no attrition, only 39,000 dropped coverage. That's a problem.

One further caveat. My premise that 30% of enrollees in non-expansion states were between 100-138% FPL (and thus Medicaid-eligible) is based on HHS reporting that 47% in those states were in the 100-150% FPL range. Again, we don't know the income breakdown specifically for Pennsylvania. But in 2014, Pennsylvania's subsidy-eligible buyers had the lowest bronze plan selection rate of any state in the nation -- an astonishing 5% -- and one of the highest silver plan takeup rates, 82% (behind only Alabama, Mississippi, and Tennessee). That suggests a high percentage of low-income buyers, because low-income buyers have to select silver to access Cost Sharing Reduction subsidies -- and if they don't select silver they're almost certain to select bronze, because gold and platinum are too expensive and, thanks to CSR, worth less than silver plans for those below 200% FPL.

It's therefore possible that the percentage of Pennsylvania's private plan holders with incomes under 138% FPL is even higher than in non-expansion-state average. On the other hand, Pennsylvania markets also featured a very cheap silver plan, well below the benchmark second-cheapest silver, that rendered silver more affordable than in most states (that windfall is gone this year).